Quiz Company determined the following standards on January 1. ...
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Accounting
Quiz Company determined the following standards on January 1.
| Direct materials | 5 lbs. per unit | $2.00 per lb. |
| Direct labor | 0.75 DL hrs. per unit | $18.00 per DL hr. |
| Variable overhead | 0.75 DL hrs. per unit | $3.00 per DL hr. |
| Fixed overhead | 0.75 DL hrs. per unit | $4.00 per DL hr. |
The fixed overhead rate was based on budgeted production of 54,000 units.
The actual results for the year were as follows.
| Units produced | 53,000 units |
| Direct materials purchased | 274,000 lbs. at $2.50 per lb. |
| Direct materials used | 270,300 lbs. |
| Direct labor | 40,100 DL hrs. at $17.95 per DL hr. |
| Variable overhead | $122,000 |
| Fixed overhead | $161,700 |
Question: Determine the variable overhead efficiency variance, and label the variance as either favorable or unfavorable
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